Most investors believe emerging market central banks must follow the Fed. If they don’t, interest rate differentials can lead to significant capital flows and currency fluctuations.
Indeed, the Fed’s pivot to easing in September has opened the policy floodgates. In Asia, the Bangko Sentral ng Pilipinas cut the policy rate by 25 basis points (bps), and the reserve requirement ratio (RRR) by 250 bps, Bank Indonesia surprised with a 25-bp rate cut, and the People’s Bank of China cut the RRR by 50 bps, and the seven-day open market operation reverse repo rate by 20 bps. Is
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
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